The National Food Authority (NFA) awarded to five winning bidders led by state-owned Vietnam Southern Foods Corp. (VSFC) the 320,000 metric tons (MT) rice imports bid out last week to beef up the country’s rice reserves and keep prices stable.

Gregorio Tan, NFA administrator said that half of the total rice imports should come in not later than Feb. 28 while the balance should enter Philippine ports by April 15 this year.

Tan said that in evaluating the tenders, the bids and awards committee considered the lowest bid price offered and compared this to current worldwide prices for Thai and Vietnamese rice with 15 and 25 percent brokens.

The winning bidders are required to undertake a countertrade program with their Philippine counterparts. About 20 bidders expressed interest in the bidding but only 16 submitted their respective bids.

NFA official said the early arrival of the rice imports would ensure that prices would still be fairly stable.

"This is a good time to import based on the movement of prices in the global market," said the NFA source.

Previously, NFA said government plans to import an initial 900,000 MT of rice in 2005 with 700,000 MT of the total volume to be imported by NFA and the rest by private traders.

Tan said the NFA prefers to bring in the rice imports in tranches rather than bringing them in one shipment so that the government is not caught in a situation when rice traders scramble for supply that would push up prices.

In November last year, the average price in the world market benchmarked against Thai rice exports was pegged at about $285 per MT. Thailand is the world’s major rice exporter and its prices have been going up because of increased government subsidies and the strengthening of Thai baht against other currencies, especially the US dollar.

Rice traders have earlier projected Thai rice prices to surge to $300 to $320 per MT in early 2005, especially in the run-up to its national elections as politicians court farmers’ votes with higher support prices.

Moreover, other exporters like China is having domestic supply concerns and is seen to withdraw from the market, along with India whose farmers are discouraged by the lack of government subsidies. China is expected to import rice mid-year and this should put pressure on rice traders to push up prices.

Tan stressed the early importation anticipates a tight supply in the first quarter, especially as the onslaught of successive typhoons and tropical depressions late last year is seen to delay the planting and harvesting of palay. The government he said, is also bracing itself for the El Nino which could stay moderate as predicted by weather experts or could take a turn for the worse.

"We would have a problem with the production and inflow of rice especially from the areas affected by the typhoons in the first quarter. Many farmers have to start over and plant again but the problem is that many already spent all that they had for planting, in procuring seeds and fertilizers. Even if they are ready to plant, many will depend largely on government assistance. So instead of harvesting early there is likely to be a delay. We are importing early because we don’t want to have a tight supply that could lead to price speculation," noted Tan.

Tan added that the NFA will review its import stance again once the Bureau of Agricultural Statistics (BAS) completes its standing crop estimates in the latter part of January.

"We could have a bigger or lesser volume of rice imports, depending on the results of the BAS survey. We will decide if the expected tight supply will continue in the second quarter because of the El Nino," he said.

Last year, the country’s total rice imports was 985,000 MT and cost government P12 billion.